The National Real Estate Development Council (NAREDCO) has urged the Central Government to address delays in Uttar Pradesh's housing projects. NAREDCO's Uttar Pradesh chapter President RK Arora has requested relief measures including rescheduling land dues over three to five years and waiving interest and penalties. The proposal includes creating an escrow account system to channel funds directly from homebuyers to project completions. NAREDCO also seeks faster sub-lease registrations, a "zero period" for interest and penalties, and project-wise resolutions through the Insolvency and Bankruptcy Board of India (IBBI) to mitigate the impact of the COVID-19 pandemic on real estate.
The National Real Estate Development Council (NAREDCO) is calling on the Central Government to intervene in addressing the delays affecting housing projects in Uttar Pradesh. In a letter directed to Union Housing Minister Manohar Lal Khattar, NAREDCO's Uttar Pradesh chapter President RK Arora has requested that relief measures be implemented to help complete stalled residential developments.
According to Arora, the ongoing liquidity crisis in the real estate sector has severely impacted developers' ability to meet financial obligations. NAREDCO is proposing a rescheduling of land dues over a period of three to five years, which would help alleviate some of the immediate financial burdens on developers. The proposal includes a request to waive interest and penalties on overdue payments, a move that they believe could provide much-needed breathing space for struggling companies.
Beyond rescheduling payments, NAREDCO is advocating for the creation of an escrow account system. This would allow the government to collect land dues directly from payments made by homebuyers for sold properties and new bookings. By implementing this system, NAREDCO believes that more funds could be directed towards completing ongoing projects, thus preventing further delays and supporting both developers and buyers.
Arora's letter also emphasises the need for faster registration and execution of sub-leases for residential towers that have already received occupancy certificates. This would not only provide clarity and security for homebuyers but would also expedite the process of moving forward with project completions. Additionally, NAREDCO is seeking a three to five-year extension for the completion of various projects without incurring additional fees, to offer developers a more feasible timeline.
The impact of the COVID-19 pandemic on real estate has been substantial. NAREDCO has suggested implementing a "zero period" for certain projects, referring to a timeframe during which interest and penalties would not be applicable. This includes a period defined by the National Green Tribunal (NGT) for projects affected by disputes and land acquisition issues. The association believes that allowing this zero period could significantly assist developers in regaining their financial footing and ultimately lead to the completion of delayed housing projects.
In addition to these measures, NAREDCO is urging the government to encourage the Insolvency and Bankruptcy Board of India (IBBI) to facilitate project-wise resolutions. Companies managing stalled projects often face insolvency challenges, and Arora has advocated that such proceedings should be a last resort. By providing interim funding and support, the government could assist developers in completing constructions and fulfilling obligations to financial institutions.
Projects in key areas such as Noida, Greater Noida, and various regions under the Yamuna Authority and Haryana governance are particularly highlighted in NAREDCO's communication to the minister. The association believes that immediate government intervention could pave the way for clearing dues and ensuring that these important housing developments can proceed without further setbacks.
As the real estate market continues to navigate the impacts of previous economic challenges, the request for government support underscores the need for collaborative efforts to revitalise the sector. By addressing the existing hurdles, stakeholders hope to create a more stable environment for both developers and homebuyers in Uttar Pradesh.
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